The 1996 Welfare Reform Bill constitutes the greatest change in public policy toward poor families since the Great Depression. Sponsors believe that its work requirements and time limits on cash assistance will benefit children because their parents will have increased self-esteem and a daily regimen, leading to better parenting, and will provide better role models. Opponents claim that the new rules will hurt children because single parents will become more stressed as they attempt to combine child care and employment. The investigators argue that no one can predict a priority which view is correct because past research on the effect of welfare on children has not focused sufficiently on these issues. A new study of the effects of the reforms on children is therefore necessary to understand the impact of this landmark legislation. In addition, such a study presents a scientific opportunity to extend knowledge on the broader issue of the effects of parental time and money resources on child well-being. The investigators propose to study the effects of welfare reform on children in three important Northeastern and Midwestern cities, Baltimore, Boston, and Chicago, over a five-year period. The conceptual framework is the economic household production model, supplemented with perspectives on child development drawn from the developmental psychology literature and informed by insights from ethnographic research. The investigators will interview 2,100 poor families with children, two- thirds of them welfare recipients, and will reinterview them annually. In Year 4, a second cohort of 1,050 will be added. The interviews will include direct assessments of children's health; their cognitive, emotional, behavioral, and physical development, the quality and character of parenting they receive, and their home environment. Among 300 families in Chicago, even more in-depth assessments, including videotaping of parent-child interaction, will be done. The investigators also will conduct rigorous, in-depth ethnographic studies of a total of 130 families in the three cities, divided among African- American, Hispanic, and non-Hispanic white poor families, half of them receiving welfare and half of them non-welfare working-poor.